[GR No.

166862, December 20, 2006]

Manila Metal Container Corporation vs. Philippine National Bank
Theme: Elements of a contract (consent), concept of a counter-offer,

Facts:
Manila Metal Container Corporation (MMCC) was the owner of 8,015 square meters of parcel of land located in
Mandaluyong City, Metro Manila which it mortgaged to secure a P900,000.00 loan from respondent Philippine National
Bank.
On August 5, 1982, respondent PNB filed a petition for extrajudicial foreclosure of the real estate mortgage and sought to
have the property sold at public auction. After due notice and publication, the property was sold at a public action where
PNB was declared the winning bidder. Petitioner sent a letter to PNB, requesting it to be granted an extension of time to
redeem/repurchase the property. PNB informed MMCC that as a matter of policy, the bank does not accept partial
redemption. Since petitioner failed to redeem the property, the Register of Deeds cancelled TCT No. 32098 and issued a
new title in favor of PNB.
Meanwhile, the Special Asset Management Department (SAMD) of PNB had prepared a statement of account of petitioners
obligation. It also recommended the management of PNB to allow petitioner to repurchase the property for P1,574,560.oo.
PNB rejected the offer and recommendation of SAMD. It instead suggested to petitioner to purchase the property for
P2,660,000.00, in its minimum market value.
MMCC however maintains that it had accepted respondents offer made through the SAMD, to repurchase the property for
P1,574,560.00 in a letter dated June 25, 1984. It then deposited P725,000.00 with the SAMD as partial payment, evidenced
by Receipt No. 978194 which respondent had issued. Petitioner avers that the SAMDs acceptance of the deposit amounted
to an acceptance of its offer to repurchase.
Issue: Whether or not MMCC and respondent PNB had entered into a perfected contract for petitioner to repurchase the
property from respondent
Ruling:
No. There was no perfected contact of sale between the parties.
A contract is meeting of minds between two persons whereby one binds himself, with respect to the other, to give
something or to render some service. Under the Civil Code, there is no contract unless the following requisites concur:
1. Consent of the contracting parties;
2. Objection certain which is the subject matter of the contract;
3. Cause of the obligation which is established.
Contract is perfected by mere consent which is manifested by the meeting of the offer and the acceptance upon the thing
and causes which are to constitute the contract. Once perfected, the bind between other contracting parties and the
obligations arising therefrom have the form of law between the parties and should be complied in good faith. The absence
of any essential element will negate the existence of a perfected contract of sale.
A definite agreement as to the price is an essential element of a binding agreement to sell personal or real property
because it seriously affects the rights and obligations of the parties. Price is an essential element in the formation of a
binding and enforceable contract of sale. The fixing of the price can never be left to the decision of one of the contracting
parties. But a price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale.
It appears from the facts that SAMD had prepared a recommendation for respondent to accept petitioners offer to
repurchase the property even beyond the one-year period; it recommended that petitioner be allowed to redeem the property
and pay P1,574,560.00 as the purchase price. PNB approved the recommendation that the property be sold to petitioner,
but instead of the P1,574,560.47 recommended by the SAMD and to which petitioner had previously conformed, respondent
set the purchase price atP2,660,000.00.
In fine, respondents acceptance of petitioners offer was qualified, hence can be at most considered as a counter-offer.
A qualified acceptance or one that involves a new proposal constitutes a counter-offer and a rejection of the original offer.
A counter-offer is considered in law, a rejection of the original offer and an attempt to end the negotiation between the
parties on a different basis. Consequently, when something is desired which is not exactly what is proposed in the offer,
such acceptance is not sufficient to guarantee consent because any modification or variation from the terms of the offer
annuls the offer. The acceptance must be identical in all respects with that of the offer so as to produce consent or meeting
of the minds.
Since the price offered by PNB (the counter-offer) was not accepted, then the contract of sale was never perfected.

MANILA METAL CONTAINER G.R. No. 166862

CORPORATION,
Petitioner,
Present:
REYNALDO C. TOLENTINO,
Intervenor, PANGANIBAN, C.J., Chairperson,
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
- versus - CALLEJO, SR., and
CHICO-NAZARIO, JJ.
PHILIPPINE NATIONAL BANK,
Respondent,
DMCI-PROJECT DEVELOPERS, Promulgated:
INC.,
Intervenor. December 20, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
CALLEJO, SR., J.:

Before us is a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) in CA-G.R. No. 46153 which
affirmed the decision[2] of the Regional Trial Court (RTC), Branch 71, Pasig City, in Civil Case No. 58551, and its Resolution[3] denying
the motion for reconsideration filed by petitioner Manila Metal Container Corporation (MMCC).

The Antecedents
Petitioner was the owner of a 8,015 square meter parcel of land located in Mandaluyong (now a City), Metro Manila. The
property was covered by Transfer Certificate of Title (TCT) No. 332098 of the Registry of Deeds of Rizal. To secure a P900,000.00
loan it had obtained from respondent Philippine National Bank (PNB), petitioner executed a real estate mortgage over the lot. Respondent
PNB later granted petitioner a new credit accommodation of P1,000,000.00; and, on November 16, 1973, petitioner executed an
Amendment[4] of Real Estate Mortgage over its property. On March 31, 1981, petitioner secured another loan of P653,000.00 from
respondent PNB, payable in quarterly installments of P32,650.00, plus interests and other charges.[5]
On August 5, 1982, respondent PNB filed a petition for extrajudicial foreclosure of the real estate mortgage and sought to have
the property sold at public auction forP911,532.21, petitioners outstanding obligation to respondent PNB as of June 30, 1982,[6] plus
interests and attorneys fees.

After due notice and publication, the property was sold at public auction on September 28, 1982 where respondent PNB was
declared the winning bidder forP1,000,000.00. The Certificate of Sale[7] issued in its favor was registered with the Office of the Register
of Deeds of Rizal, and was annotated at the dorsal portion of the title on February 17, 1983. Thus, the period to redeem the property was
to expire on February 17, 1984.
Petitioner sent a letter dated August 25, 1983 to respondent PNB, requesting that it be granted an extension of time to redeem/repurchase
the property.[8] In its reply datedAugust 30, 1983, respondent PNB informed petitioner that the request had been referred to its Pasay City
Branch for appropriate action and recommendation.[9]
In a letter[10] dated February 10, 1984, petitioner reiterated its request for a one year extension from February 17, 1984 within which to
redeem/repurchase the property on installment basis. It reiterated its request to repurchase the property on installment.[11] Meanwhile,
some PNB Pasay City Branch personnel informed petitioner that as a matter of policy, the bank does not accept partial redemption.[12]
Since petitioner failed to redeem the property, the Register of Deeds cancelled TCT No. 32098 on June 1, 1984, and issued a
new title in favor of respondent PNB.[13]Petitioners offers had not yet been acted upon by respondent PNB.
Meanwhile, the Special Assets Management Department (SAMD) had prepared a statement of account, and as of June 25,
1984 petitioners obligation amounted toP1,574,560.47. This included the bid price of P1,056,924.50, interest, advances of insurance
premiums, advances on realty taxes, registration expenses, miscellaneous expenses and publication cost.[14] When apprised of the
statement of account, petitioner remitted P725,000.00 to respondent PNB as deposit to repurchase, and Official Receipt No. 978191 was
issued to it.[15]
In the meantime, the SAMD recommended to the management of respondent PNB that petitioner be allowed to repurchase the property
for P1,574,560.00. In a letter datedNovember 14, 1984, the PNB management informed petitioner that it was rejecting the offer and the
recommendation
of
the SAMD. It was suggested that petitioner purchase the property for P2,660,000.00, its minimum market value. Respondent PNB gave
petitioner until December 15, 1984 to act on the proposal; otherwise, its P725,000.00 deposit would be returned and the property would
be sold to other interested buyers.[16]
Petitioner, however, did not agree to respondent PNBs proposal. Instead, it wrote another letter dated December 12,
1984 requesting for a reconsideration. Respondent PNB replied in a letter dated December 28, 1984, wherein it reiterated its proposal
that petitioner purchase the property for P2,660,000.00. PNB again informed petitioner that it would return the deposit should petitioner
desire to withdraw its offer to purchase the property.[17] On February 25, 1985, petitioner, through counsel, requested that PNB reconsider
its letter dated December 28, 1984. Petitioner declared that it had already agreed to the SAMDs offer to purchase the property
for P1,574,560.47, and that was why it had paid P725,000.00. Petitioner warned respondent PNB that it would seek judicial recourse
should PNB insist on the position.[18]
On June 4, 1985, respondent PNB informed petitioner that the PNB Board of Directors had accepted petitioners offer to
purchase the property, but for P1,931,389.53 in cash less the P725,000.00 already deposited with it.[19] On page two of the letter was a
space above the typewritten name of petitioners President, Pablo Gabriel, where he was to affix his signature. However, Pablo Gabriel
did not conform to the letter but merely indicated therein that he had received it.[20] Petitioner did not respond, so PNB requested
petitioner in a letter dated June 30, 1988 to submit an amended offer to repurchase.

Petitioner rejected respondents proposal in a letter dated July 14, 1988. It maintained that respondent PNB had agreed to sell
the property for P1,574,560.47, and that since its P725,000.00 downpayment had been accepted, respondent PNB was proscribed from
increasing the purchase price of the property.[21] Petitioner averred that it had a net balance payable in the amount of P643,452.34.
Respondent PNB, however, rejected petitioners offer to pay the balance of P643,452.34 in a letter dated August 1, 1989.[22]
On August 28, 1989, petitioner filed a complaint against respondent PNB for Annulment of Mortgage and Mortgage
Foreclosure, Delivery of Title, or Specific Performance with Damages. To support its cause of action for specific performance, it alleged
the following:
34. As early as June 25, 1984, PNB had accepted the down payment from Manila Metal in the substantial amount
of P725,000.00 for the redemption/repurchase price of P1,574,560.47 as approved by its SMAD and considering
the reliance made by Manila Metal and the long time that has elapsed, the approval of the higher management of
the Bank to confirm the agreement of its SMAD is clearly a potestative condition which cannot legally prejudice
Manila Metal which has acted and relied on the approval of SMAD. The Bank cannot take advantage of a
condition which is entirely dependent upon its own will after accepting and benefiting from the substantial
payment made by Manila Metal.
35. PNB approved the repurchase price of P1,574,560.47 for which it accepted P725,000.00 from Manila Metal. PNB
cannot take advantage of its own delay and long inaction in demanding a higher amount based on unilateral
computation of interest rate without the consent of Manila Metal.
Petitioner later filed an amended complaint and supported its claim for damages with the following arguments:
36. That in order to protect itself against the wrongful and malicious acts of the defendant Bank, plaintiff is constrained
to engage the services of counsel at an agreed fee of P50,000.00 and to incur litigation expenses of at
least P30,000.00, which the defendant PNB should be condemned to pay the plaintiff Manila Metal.

37. That by reason of the wrongful and malicious actuations of defendant PNB, plaintiff Manila Metal suffered
besmirched reputation for which defendant PNB is liable for moral damages of at least P50,000.00.
38. That for the wrongful and malicious act of defendant PNB which are highly reprehensible, exemplary damages
should be awarded in favor of the plaintiff by way of example or correction for the public good of at
least P30,000.00.[23]

Petitioner prayed that, after due proceedings, judgment be rendered in its favor, thus:
a) Declaring the Amended Real Estate Mortgage (Annex A) null and void and without any legal force and effect.
b)

Declaring defendants acts of extra-judicially foreclosing the mortgage over plaintiffs property and setting it for
auction sale null and void.

c)

Ordering the defendant Register of Deeds to cancel the new title issued in the name of PNB (TCT NO.
43792) covering the property described in paragraph 4 of the Complaint, to reinstate TCT No. 37025 in the name
of Manila Metal and to cancel the annotation of the mortgage in question at the back of the TCT
No. 37025 described in paragraph 4 of this Complaint.

d)

Ordering the defendant PNB to return and/or deliver physical possession of the TCT No. 37025 described in
paragraph 4 of this Complaint to the plaintiff Manila Metal.

e)

Ordering the defendant PNB to pay the plaintiff Manila Metals actual damages, moral and exemplary damages
in the aggregate amount of not less than P80,000.00 as may be warranted by the evidence and fixed by this
Honorable Court in the exercise of its sound discretion, and attorneys fees of P50,000.00 and litigation expenses
of at least P30,000.00 as may be proved during the trial, and costs of suit.
Plaintiff likewise prays for such further reliefs which may be deemed just and equitable in the premises.[24]

In its Answer to the complaint, respondent PNB averred, as a special and affirmative defense, that it had acquired ownership
over the property after the period to redeem had elapsed. It claimed that no contract of sale was perfected between it and petitioner after
the period to redeem the property had expired.
During pre-trial, the parties agreed to submit the case for decision, based on their stipulation of facts.[25] The parties agreed to
limit the issues to the following:
1. Whether or not the June 4, 1985 letter of the defendant approving/accepting plaintiffs offer to purchase the property
is still valid and legally enforceable.
2. Whether or not the plaintiff has waived its right to purchase the property when it failed to conform with the
conditions set forth by the defendant in its letter dated June 4, 1985.
3. Whether or not there is a perfected contract of sale between the parties.[26]

While the case was pending, respondent PNB demanded, on September 20, 1989, that petitioner vacate the property within 15
days from notice,[27] but petitioners refused to do so.
On March 18, 1993, petitioner offered to repurchase the property for P3,500,000.00.[28] The offer was however rejected by
respondent PNB, in a letter dated April 13, 1993. According to it, the prevailing market value of the property was
approximately P30,000,000.00, and as a matter of policy, it could not sell the property for less than its market value.[29] On June 21,
1993, petitioner offered to purchase the property for P4,250,000.00 in cash.[30] The offer was again rejected by respondent PNB
on September 13, 1993.[31]
On May 31, 1994, the trial court rendered judgment dismissing the amended complaint and respondent PNBs counterclaim. It
ordered respondent PNB to refund theP725,000.00 deposit petitioner had made.[32] The trial court ruled that there was no perfected
contract of sale between the parties; hence, petitioner had no cause of action for specific performance against respondent. The trial court
declared that respondent had rejected petitioners offer to repurchase the property. Petitioner, in turn, rejected the terms and conditions
contained in the June 4, 1985 letter of the SAMD. While petitioner had offered to repurchase the property per its letter of
July 14, 1988, the amount of P643,422.34 was way below the P1,206,389.53 which respondent PNB had demanded. It further declared
that the P725,000.00 remitted by petitioner to respondent PNB on June 4, 1985 was a deposit, and not a downpayment or earnest money.
On appeal to the CA, petitioner made the following allegations:
I
THE LOWER COURT ERRED IN RULING THAT DEFENDANT-APPELLEES LETTER DATED 4 JUNE
1985 APPROVING/ACCEPTING PLAINTIFF-APPELLANTS OFFER TO PURCHASE THE SUBJECT
PROPERTY IS NOT VALID AND ENFORCEABLE.
II

THE LOWER COURT ERRED IN RULING THAT THERE WAS NO PERFECTED CONTRACT
OF SALE BETWEEN PLAINTIFF-APPELLANT AND DEFENDANT-APPELLEE.
III
THE LOWER COURT ERRED IN RULING THAT PLAINTIFF-APPELLLANT WAIVED ITS RIGHT TO
PURCHASE THE SUBJECT PROPERTY WHEN IT FAILED TO CONFORM WITH CONDITIONS
SET FORTH BY DEFENDANT-APPELLEE IN ITS LETTER DATED 4 JUNE 1985.
IV
THE LOWER COURT ERRED IN DISREGARDING THE FACT THAT IT WAS THE DEFENDANT-APPELLEE
WHICH RENDERED IT DIFFICULT IF NOT IMPOSSIBLE FOR PLAINTIFF-APPELLANT TO COMPLETE
THE BALANCE OF THEIR PURCHASE PRICE.
V
THE LOWER COURT ERRED IN DISREGARDING THE FACT THAT THERE WAS NO VALID RESCISSION
OR CANCELLATION OF SUBJECT CONTRACT OF REPURCHASE.
VI
THE LOWER COURT ERRED IN DECLARING THAT PLAINTIFF FAILED AND REFUSED TO SUBMIT THE
AMENDED REPURCHASE OFFER.
VII
THE LOWER COURT ERRED IN DISMISSING THE AMENDED COMPLAINT OF PLAINTIFF-APPELLANT.
VIII
THE LOWER COURT ERRED IN NOT AWARDING PLAINTIFF-APPELLANT ACTUAL, MORAL AND
EXEMPLARY DAMAGES, ATTOTRNEYS FEES AND LITIGATION EXPENSES.[33]
Meanwhile, on June 17, 1993, petitioners Board of Directors approved Resolution No. 3-004, where it waived, assigned and
transferred its rights over the property covered by TCT No. 33099 and TCT No. 37025 in favor of Bayani Gabriel, one of its
Directors.[34] Thereafter, Bayani Gabriel executed a Deed of Assignment over 51% of the ownership and management of the property
in favor of Reynaldo Tolentino, who later moved for leave to intervene as plaintiff-appellant. On July 14, 1993, the CA issued a
resolution granting the motion,[35] and likewise granted the motion of Reynaldo Tolentino substituting petitioner MMCC, as plaintiffappellant, and his motion to withdraw as intervenor.[36]
The CA rendered judgment on May 11, 2000 affirming the decision of the RTC.[37] It declared that petitioner obviously never
agreed to the selling price proposed by respondent PNB (P1,931,389.53) since petitioner had kept on insisting that the selling price
should be lowered to P1,574,560.47. Clearly therefore, there was no meeting of the minds between the parties as to the price or
consideration of the sale.
The CA ratiocinated that petitioners original offer to purchase the subject property had not been accepted by respondent PNB. In
fact, it made a counter-offer through itsJune 4, 1985 letter specifically on the selling price; petitioner did not agree to the counter-offer;
and the negotiations did not prosper. Moreover, petitioner did not pay the balance of the purchase price within the sixty-day period set
in the June 4, 1985 letter of respondent PNB. Consequently, there was no perfected contract of sale, and as such, there was no contract
to rescind.
According to the appellate court, the claim for damages and the counterclaim were correctly dismissed by the court a quo for
no evidence was presented to support it.Respondent PNBs letter dated June 30, 1988 cannot revive the failed negotiations between the
parties. Respondent PNB merely asked petitioner to submit an amended offer to repurchase. While petitioner reiterated its request for a
lower selling price and that the balance of the repurchase be reduced, however, respondent rejected the proposal in a letter dated August
1, 1989.
Petitioner filed a motion for reconsideration, which the CA likewise denied.
Thus, petitioner filed the instant petition for review on certiorari, alleging that:
I. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THERE IS NO
PERFECTED CONTRACT OF SALE BETWEEN THE PETITIONER AND RESPONDENT.
II. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THE AMOUNT
OF PHP725,000.00 PAID BY THE PETITIONER IS NOT AN EARNEST MONEY.
III. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THE FAILURE
OF THE PETITIONER-APPELLANT TO SIGNIFY ITS CONFORMITY TO THE TERMS CONTAINED
IN PNBS JUNE 4, 1985 LETTER MEANS THAT THERE WAS NO VALID AND LEGALLY
ENFORCEABLE CONTRACT OF SALE BETWEEN THE PARTIES.
IV. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW THAT NON-PAYMENT OF THE
PETITIONER-APPELLANT OF THE BALANCE OF THE OFFERED PRICE IN THE LETTER OF PNB
DATED JUNE 4, 1985, WITHIN SIXTY (60) DAYS FROM NOTICE OF APPROVAL CONSTITUTES
NO VALID AND LEGALLY ENFORCEABLE CONTRACT OF SALE BETWEEN THE PARTIES.
V. THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT HELD THAT THE LETTERS OF PETITIONERAPPELLANT DATED MARCH 18, 1993 AND JUNE 21, 1993, OFFERING TO BUY THE SUBJECT

PROPERTY AT DIFFERENT AMOUNT WERE PROOF THAT THERE IS NO PERFECTED

CONTRACT OF SALE.[38]

The threshold issue is whether or not petitioner and respondent PNB had entered into a perfected contract for petitioner to repurchase
the property from respondent.
Petitioner maintains that it had accepted respondents offer made through the SAMD, to sell the property
for P1,574,560.00. When the acceptance was made in its letter dated June 25, 1984; it then deposited P725,000.00 with the SAMD as
partial payment, evidenced by Receipt No. 978194 which respondent had issued. Petitioner avers that theSAMDs acceptance of the
deposit amounted to an acceptance of its offer to repurchase. Moreover, as gleaned from the letter of SAMD dated June 4, 1985, the
PNB Board of Directors had approved petitioners offer to purchase the property. It claims that this was the suspensive condition, the
fulfillment of which gave rise to the contract. Respondent could no longer unilaterally withdraw its offer to sell the property
for P1,574,560.47, since the acceptance of the offer resulted in a perfected contract of sale; it was obliged to remit to respondent the
balance of the original purchase price of P1,574,560.47, while respondent was obliged to transfer ownership and deliver the property to
petitioner, conformably with Article 1159 of the New Civil Code.
Petitioner posits that respondent was proscribed from increasing the interest rate after it had accepted respondents offer to sell
the property for P1,574,560.00.Consequently, respondent could no longer validly make a counter-offer of P1,931,789.88 for the purchase
of the property. It likewise maintains that, although the P725,000.00 was considered as deposit for the repurchase of the property in the
receipt issued by the SAMD, the amount constitutes earnest money as contemplated in Article 1482 of the New Civil Code. Petitioner
cites the rulings of this Court in Villonco v. Bormaheco[39] and Topacio v. Court of Appeals.[40]
Petitioner avers that its failure to append its conformity to the June 4, 1984 letter of respondent and its failure to pay the balance of the
price as fixed by respondent within the 60-day period from notice was to protest respondents breach of its obligation to petitioner. It did
not amount to a rejection of respondents offer to sell the property since respondent was merely seeking to enforce its right to pay the
balance of P1,570,564.47. In any event, respondent had the option either to accept the balance of the offered price or to cause the
rescission of the contract.
Petitioners letters dated March 18, 1993 and June 21, 1993 to respondent during the pendency of the case in the RTC were merely to
compromise the pending lawsuit, they did not constitute separate offers to repurchase the property. Such offer to compromise should
not be taken against it, in accordance with Section 27, Rule 130 of the Revised Rules of Court.
For its part, respondent contends that the parties never graduated from the negotiation stage as they could not agree on the
amount of the repurchase price of the property.All that transpired was an exchange of proposals and counter-proposals, nothing more. It
insists that a definite agreement on the amount and manner of payment of the price are essential elements in the formation of a binding
and enforceable contract of sale. There was no such agreement in this case. Primarily, the concept of suspensive condition signifies a
future and uncertain event upon the fulfillment of which the obligation becomes effective. It clearly presupposes the existence of a valid
and binding agreement, theeffectivity of which is subordinated to its fulfillment. Since there is no perfected contract in the first place,
there is no basis for the application of the principles governingsuspensive conditions.
According to respondent, the Statement of Account prepared by SAMD as of June 25, 1984 cannot be classified as a counter-offer; it is
simply a recital of its total monetary claims against petitioner. Moreover, the amount stated therein could not likewise be considered as
the counter-offer since as admitted by petitioner, it was only recommendation which was subject to approval of the PNB Board of
Directors.
Neither can the receipt by the SAMD of P725,000.00 be regarded as evidence of a perfected sale contract. As gleaned from the
parties Stipulation of Facts during the proceedings in the court a quo, the amount is merely an acknowledgment of the receipt
of P725,000.00 as deposit to repurchase the property. The deposit of P725,000.00 was accepted by respondent on the condition that the
purchase price would still be approved by its Board of Directors. Respondent maintains that its acceptance of the amount was qualified
by that condition, thus not absolute. Pending such approval, it cannot be legally claimed that respondent is already bound by any contract
of sale with petitioner.
According to respondent, petitioner knew that the SAMD has no capacity to bind respondent and that its authority is limited to
administering, managing and preserving the properties and other special assets of PNB. The SAMD does not have the power to sell,
encumber, dispose of, or otherwise alienate the assets, since the power to do so must emanate from its Board of Directors. The SAMD
was not authorized by respondents Board to enter into contracts of sale with third persons involving corporate assets. There is absolutely
nothing on record that respondent authorized the SAMD, or made it appear to petitioner that it represented itself as having such authority.
Respondent reiterates that SAMD had informed petitioner that its offer to repurchase had been approved by the Board subject to the
condition, among others, that the selling price shall be the total banks claim as of documentation date x x x payable in cash (P725,000.00
already deposited)

within 60 days from notice of approval. A new Statement of Account was attached therein indicating the total banks claim to
be P1,931,389.53 less deposit of P725,000.00, orP1,206,389.00. Furthermore, while respondents Board of Directors accepted petitioners
offer to repurchase the property, the acceptance was qualified, in that it required a higher sale price and subject to specified terms and
conditions enumerated therein. This qualified acceptance was in effect a counter-offer, necessitating petitioners acceptance in return.

The Ruling of the Court

The ruling of the appellate court that there was no perfected contract of sale between the parties on June 4, 1985 is correct.
A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to
render some service.[41] Under Article 1318 of the New Civil Code, there is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.
Contracts are perfected by mere consent which is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract.[42]Once perfected, they bind other contracting parties and the obligations arising therefrom have the
form of law between the parties and should be complied with in good faith. The parties are bound not only to the fulfillment of what has
been expressly stipulated but also to the consequences which, according to their nature, may be in keeping with good faith, usage and
law.[43]
By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and deliver a determinate thing, and
the other to pay therefor a price certain in money or its equivalent.[44] The absence of any of the essential elements will negate the
existence of a perfected contract of sale. As the Court ruled in Boston Bank of the Philippines v. Manalo:[45]
A definite agreement as to the price is an essential element of a binding agreement to sell personal or real property
because it seriously affects the rights and obligations of the parties. Price is an essential element in the formation of a
binding and enforceable contract of sale. The fixing of the price can never be left to the decision of one of the
contracting parties. But a price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected
sale.[46]
A contract of sale is consensual in nature and is perfected upon mere meeting of the minds. When there is merely an offer by one party
without acceptance of the other, there is no contract.[47] When the contract of sale is not perfected, it cannot, as an independent source
of obligation, serve as a binding juridical relation between the parties.[48]
In San Miguel Properties Philippines, Inc. v. Huang,[49] the Court ruled that the stages of a contract of sale are as follows: (1) negotiation,
covering the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is perfected;
(2) perfection, which takes place upon the concurrence of the essential elements of the sale which are the meeting of the minds of the
parties as to the object of the contract and upon the price; and (3) consummation, which begins when the parties perform their respective
undertakings under the contract of sale, culminating in the extinguishment thereof.

A negotiation is formally initiated by an offer, which, however, must be certain.[50] At any time prior to the perfection of the contract,
either negotiating party may stop the negotiation. At this stage, the offer may be withdrawn; the withdrawal is effective immediately
after its manifestation. To convert the offer into a contract, the acceptance must be absolute and must not qualify the terms of the offer;
it must be plain, unequivocal, unconditional and without variance of any sort from the proposal. In Adelfa Properties, Inc. v. Court of
Appeals,[51] the Court ruled that:
x x x The rule is that except where a formal acceptance is so required, although the acceptance must be affirmatively
and clearly made and must be evidenced by some acts or conduct communicated to the offeror, it may be shown by
acts, conduct, or words of the accepting party that clearly manifest a present intention or determination to accept the
offer to buy or sell. Thus, acceptance may be shown by the acts, conduct, or words of a party recognizing the existence
of the contract of sale.[52]
A qualified acceptance or one that involves a new proposal constitutes a counter-offer and a rejection of the original offer. A counteroffer is considered in law, a rejection of the original offer and an attempt to end the negotiation between the parties on a different
basis.[53] Consequently, when something is desired which is not exactly what is proposed in the offer, such acceptance is not sufficient
to guarantee consent because any modification or variation from the terms of the offer annuls the offer.[54] The acceptance must be
identical in all respects with that of the offer so as to produce consent or meeting of the minds.
In this case, petitioner had until February 17, 1984 within which to redeem the property. However, since it lacked the resources,
it requested for more time to redeem/repurchase the property under such terms and conditions agreed upon by the parties.[55] The request,
which was made through a letter dated August 25, 1983, was referred to the respondents main branch for appropriate action.[56] Before
respondent could act on the request, petitioner again wrote respondent as follows:
1. Upon approval of our request, we will pay your goodselves ONE HUNDRED & FIFTY THOUSAND PESOS
(P150,000.00);
2. Within six months from date of approval of our request, we will pay another FOUR HUNDRED FIFTY
THOUSAND PESOS (P450,000.00); and
3. The remaining balance together with the interest and other expenses that will be incurred will be paid within the
last six months of the one year grave period requested for.[57]

When the petitioner was told that respondent did not allow partial redemption,[58] it sent a letter to respondents President reiterating its
offer to purchase the property.[59]There was no response to petitioners letters dated February 10 and 15, 1984.
The statement of account prepared by the SAMD stating that the net claim of respondent as of June 25, 1984 was P1,574,560.47
cannot be considered an unqualified acceptance to petitioners offer to purchase the property. The statement is but a computation of the
amount which petitioner was obliged to pay in case respondent would later agree to sell the property, including interests, advances on
insurance premium, advances on realty taxes, publication cost, registration expenses and miscellaneous expenses.
There is no evidence that the SAMD was authorized by respondents Board of Directors to accept petitioners offer and sell the
property for P1,574,560.47. Any acceptance by the SAMD of petitioners offer would not bind respondent. As this Court ruled in AF
Realty Development, Inc. vs. Diesehuan Freight Services, Inc.:[60]

Section 23 of the Corporation Code expressly provides that the corporate powers of all corporations shall be
exercised by the board of directors. Just as a natural person may authorize another to do certain acts in his behalf, so
may the board of directors of a corporation validly delegate some of its functions to individual officers or agents
appointed by it. Thus, contracts or acts of a corporation must be made either by the board of directors or by a corporate
agent duly authorized by the board. Absent such valid delegation/authorization, the rule is that the declarations of an
individual director relating to the affairs of the corporation, but not in the course of, or connected with the performance
of authorized duties of such director, are held not binding on the corporation.

Thus, a corporation can only execute its powers and transact its business through its Board of Directors and through its officers
and agents when authorized by a board resolution or its by-laws.[61]
It appears that the SAMD had prepared a recommendation for respondent to accept petitioners offer to repurchase the property
even beyond the one-year period; it recommended that petitioner be allowed to redeem the property and pay P1,574,560.00 as the
purchase price. Respondent later approved the recommendation that the property be sold to petitioner. But instead of the P1,574,560.47
recommended by the SAMD and to which petitioner had previously conformed, respondent set the purchase price atP2,660,000.00. In
fine, respondents acceptance of petitioners offer was qualified, hence can be at most considered as a counter-offer. If petitioner had
accepted this counter-offer, a perfected contract of sale would have arisen; as it turns out, however, petitioner merely sought to have the
counter-offer reconsidered. This request for reconsideration would later be rejected by respondent.
We do not agree with petitioners contention that the P725,000.00 it had remitted to respondent was earnest money which could
be considered as proof of the perfection of a contract of sale under Article 1482 of the New Civil Code. The provision reads:

ART. 1482. Whenever earnest money is given in a contract of sale, it shall be considered as part of the price
and as proof of the perfection of the contract.

This contention is likewise negated by the stipulation of facts which the parties entered into in the trial court:
8. On June 8, 1984, the Special Assets Management Department (SAMD) of PNB prepared an updated
Statement of Account showing MMCCs total liability to PNB as of June 25, 1984 to be P1,574,560.47 and
recommended this amount as the repurchase price of the subject property.
9. On June 25, 1984, MMCC paid P725,000.00 to PNB as deposit to repurchase the property. The deposit of
P725,000 was accepted by PNB on the condition that the purchase price is still subject to the approval of the PNB
Board.[62]

Thus, the P725,000.00 was merely a deposit to be applied as part of the purchase price of the property, in the event that
respondent would approve the recommendation of SAMD for respondent to accept petitioners offer to purchase the property
for P1,574,560.47. Unless and until the respondent accepted the offer on these terms, no perfected contract of sale would arise. Absent
proof of the concurrence of all the essential elements of a contract of sale, the giving of earnest money cannot establish the existence of
a perfected contract of sale.[63]
It appears that, per its letter to petitioner dated June 4, 1985, the respondent had decided to accept the offer to purchase the property
for P1,931,389.53. However, this amounted to an amendment of respondents qualified acceptance, or an amended counter-offer, because
while the respondent lowered the purchase price, it still declared that its acceptance was subject to the following terms and conditions:

1.

That the selling price shall be the total Banks claim as of documentation date (pls. see attached statement of
account as of 5-31-85), payable in cash (P725,000.00 already deposited) within sixty (60) days from notice of
approval;

2.

The Bank sells only whatever rights, interests and participation it may have in the property and you are
charged with full knowledge of the nature and extent of said rights, interests and participation and waive your
right to warranty against eviction.

3.

All taxes and other government imposts due or to become due on the property, as well as expenses including
costs of documents and science stamps, transfer fees, etc., to be incurred in connection with the execution and
registration of all covering documents shall be borne by you;

4.

That you shall undertake at your own expense and account the ejectment of the occupants of the property
subject of the sale, if there are any;

5.

That upon your failure to pay the balance of the purchase price within sixty (60) days from receipt of advice
accepting your offer, your deposit shall be forfeited and the Bank is thenceforth authorized to sell the property
to other interested parties.

6.

That the sale shall be subject to such other terms and conditions that the Legal Department may impose to
protect the interest of the Bank.[64]

It appears that although respondent requested petitioner to conform to its amended counter-offer, petitioner refused and instead
requested respondent to reconsider its amended counter-offer. Petitioners request was ultimately rejected and respondent offered to
refund its P725,000.00 deposit.
In sum, then, there was no perfected contract of sale between petitioner and respondent over the subject property.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED.

The assailed decision is AFFIRMED. Costs against petitioner Manila Metal Container Corporation.
SO ORDERED.

TOYOTA SHAW, INC., petitioner,

vs.
COURT OF APPEALS and LUNA L. SOSA, respondents.
FACTS:
Sometime in June 1989, Luna L. Sosa wanted to buy a Toyota Lite Ace from Popong Bernardo. Thus, a document was executed
(please refer sa Exhibit A sa fulltext). Sosa emphasized to Bernardo that he needed the Lite Ace not later than June 17, 1989 because
he, his family and a balik-bayan guest would use it on June 18 to go to Marinduque where he would celebrate his birthday on June 19.
He added that if he does not arrive in his hometown with the new car, he would become a laughing stock.
It was also agreed upon by the parties that the balance of the purchase price would be paid by credit financing through B.A.
Finance. On June 15, a down payment was delivered. Sosa met Bernardo who then accomplished a printed Vehicle Sales Proposal No.
928 (palihug nalang refer sa full text ^^).
On June 17, the day the car would be delivered, Bernardo called the son of Sosa saying that the vehicle would not be ready for
pick up at 10am but at 2pm. Thus, Sosa and his son wait but the car never arrived. Bernardo told them that the car could not be delivered
because nasulot anf unit ng ibang malakas.
Because of this, Sosa filed a legal action for damages for the embarrassment. He asked for 1,230,000 pesos.
Toyota contended that Bernardo has no authority to sell and there was no perfected contract of sale. The VSP did not state a
date of delivery; Sosa had not completed the documents required by the financing company and; the venue was improperly laid.
Trial Court:
In favour of Sosa, contending that Bernardo was an agent of Toyota. Also, Sosa suffered humiliation and thus, should be
compensated.
CA:
Affirmed the decision of the trial court in toto.
ISSUE:
Whether there was a perfected contract of sale.
SC RULING:

There was no perfected contract of sale. Article 1458 of the Civil Code defined a contract of sale. No obligation on the part of
Toyota to transfer ownership of a determinate thing to Sosa and no correlative obligation on the part of the latter to pay therefore a
price certain appears therein. The provision on the downpayment of P100,000.00 made no specific reference to a sale of a vehicle. If it
was intended for a contract of sale, it could only refer to a sale on installment basis, as the VSP executed the following day confirmed.
But nothing was mentioned about the full purchase price and the manner the installments were to be paid.
This Court had already ruled that a definite agreement on the manner of payment of the price is an essential element in the
formation of a binding and enforceable contract of sale. 18 This is so because the agreement as to the manner of payment goes into the
price such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. Definiteness as to the price
is an essential element of a binding agreement to sell personal property.
Moreover, the element of meeting of mind was not established. Exhibit A shows the absence of the meeting of minds between
Toyota and Sosa. For one thing, Sosa, did not even sign it. For another, Sosa was not dealing with Toyota according to the title of the
exhibit but with Bernardo. Bernardo was only a sales representative, he has no authority to sell. Furthermore, in a sale on installment
basis which is financed by a financing company, three parties are thus involved: the buyer who executes a note or notes for the unpaid
balance of the price of the thing purchased on installment, the seller who assigns the notes or discounts them with a financing company,
and the financing company which is subrogated in the place of the seller, as the creditor of the installment buyer. Since B.A. Finance did
not approve Sosa's application, there was then no meeting of minds on the sale on installment basis.
At most, Exhibit A may be considered as part of the initial phase of the generation or negotiation stage of a contract of sale.
There are three stages in the contract of sale: 1) preparation, conception, or generation which is a period of bargaining and negotiation,
ending at the moment of the agreement of the parties; 2) perfection or birth of the contract, parties agrees to the terms and; 3)
consummation or death.
Pride and ego should not be the basis to compute moral and exemplary damages. Sosa should not have announced to his
relatives and neighbors that he will be buying a new car. It was he who brought embarrassment to himself.
Therefore, the petition was granted. The decisions of the CA and Trial Court are reversed.

G.R. No. L-27044 June 30, 1975

THE COMMISSIONER OF INTERNAL REVENUE, petitioner,
vs.
ENGINEERING EQUIPMENT AND SUPPLY COMPANY AND THE COURT OF TAX APPEALS, respondents.

Engineering Equipment and Supply Co. (Engineering for short)

- a domestic corporation
- an engineering and machinery firm
- engaged, among others, in the design and installation of central type air conditioning system, pumping plants and steel fabrications

FACTS:
Juan de la Cruz, wrote the then Collector, now Commissioner, of Internal Revenue denouncing Engineering for tax evasion by
misdeclaring its imported articles and failing to pay the correct percentage taxes due thereon in connivance with its foreign suppliers
evenue examiners Quesada and Catudan reported and recommended to the then Collector, now Commissioner, of Internal Revenue
(hereinafter referred to as Commissioner) that Engineering be assessed for P480,912.01 as deficiency advance sales tax on the
theory that it misdeclared its importation of air conditioning units and parts and accessories thereof which are subject to tax under
Section 185(m) 1 of the Tax Code, instead of Section 186 of the same Code.

Court of Tax Appeals

For ALL THE FOREGOING CONSIDERATIONS, the decision of respondent appealed from is hereby modified, and petitioner, as a
contractor, is declared exempt from the deficiency manufacturers sales tax covering the period from June 1, 1948. to September 2,
1956. However, petitioner is ordered to pay respondent, or his duly authorized collection agent, the sum of P174,141.62 as
compensating tax and 25% surcharge for the period from 1953 to September 1956. With costs against petitioner.
ISSUE
whether or not Engineering is a manufacturer of air conditioning units under Section 185(m), supra, in relation to Sections 183(b)
and 194 of the Code, or a contractor under Section 191 of the same Code.

SC RULING
A Contractor.
Engineering definitely did not and was not engaged in the manufacture of air conditioning units but had its services contracted for
the installation of a central system.
The Commissioner contends that Engineering is a manufacturer and seller of air conditioning units and parts or accessories thereof
and, therefore, it is subject to the 30% advance sales tax prescribed by Section 185(m) of the Tax Code, in relation to Section 194 of
the same, which defines a manufacturer as follows:
Section 194. Words and Phrases Defined. In applying the provisions of this Title, words and phrases shall be taken in the sense
and extension indicated below:
xxx xxx xxx
(x) "Manufacturer" includes every person who by physical or chemical process alters the exterior texture or form or inner substance
of any raw material or manufactured or partially manufactured products in such manner as to prepare it for a special use or uses to
which it could not have been put in its original condition, or who by any such process alters the quality of any such material or
manufactured or partially manufactured product so as to reduce it to marketable shape, or prepare it for any of the uses of industry,
or who by any such process combines any such raw material or manufactured or partially manufactured products with other
materials or products of the same or of different kinds and in such manner that the finished product of such process of manufacture
can be put to special use or uses to which such raw material or manufactured or partially manufactured products in their original
condition could not have been put, and who in addition alters such raw material or manufactured or partially manufactured
products, or combines the same to produce such finished products for the purpose of their sale or distribution to others and not for
his own use or consumption.
Engineering claims that it is not a manufacturer and setter of air-conditioning units and spare parts or accessories thereof subject to
tax under Section 185(m) of the Tax Code, but a contractor engaged in the design, supply and installation of the central type of airconditioning system subject to the 3% tax imposed by Section 191 of the same Code, which is essentially a tax on the sale of services
or labor of a contractor rather than on the sale of articles subject to the tax referred to in Sections 184, 185 and 186 of the Code.
Our New Civil Code, likewise distinguishes a contract of sale from a contract for a piece of work thus:
Art. 1467. A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business
manufactures or procures for the general market, whether the same is on hand at the time or not, is a contract of sale, but if the
goods are to be manufactured specially for the customer and upon his special order and not for the general market, it is a contract
for a piece of work.
The word "contractor" has come to be used with special reference to a person who, in the pursuit of the independent business,
undertakes to do a specific job or piece of work for other persons, using his own means and methods without submitting himself to
control as to the petty details. (Araas, Annotations and Jurisprudence on the National Internal Revenue Code, p. 318, par. 191 (2),
1970 Ed.) The true test of a contractor as was held in the cases of Luzon Stevedoring Co., vs. Trinidad, 43, Phil. 803, 807-808, andLa
Carlota Sugar Central vs. Trinidad, 43, Phil. 816, 819, would seem to be that he renders service in the course of an independent
occupation, representing the will of his employer only as to the result of his work, and not as to the means by which it is
accomplished.
Findings:
Engineering did not manufacture air conditioning units for sale to the general public, but imported some items (as refrigeration
compressors in complete set, heat exchangers or coils, t.s.n. p. 39) which were used in executing contracts entered into by it.
Engineering, therefore, undertook negotiations and execution of individual contracts for the design, supply and installation of air
conditioning units of the central type, taking into consideration in the process such factors as the area of the space to be air
conditioned; the number of persons occupying or would be occupying the premises; the purpose for which the various air
conditioning areas are to be used; and the sources of heat gain or cooling load on the plant such as sun load, lighting, and other
electrical appliances which are or may be in the plan. Engineering also testified during the hearing in the Court of Tax Appeals that
relative to the installation of air conditioning system, Engineering designed and engineered complete each particular plant and that
no two plants were identical but each had to be engineered separately.
The supply of air conditioning units to Engineer's various customers, whether the said machineries were in hand or not, was
especially made for each customer and installed in his building upon his special order. The air conditioning units installed in a central
type of air conditioning system would not have existed but for the order of the party desiring to acquire it and if it existed without
the special order of Engineering's customer, the said air conditioning units were not intended for sale to the general public.
Therefore, We have but to affirm the conclusion of the Court of Tax Appeals that Engineering is a contractor rather than a
manufacturer, subject to the contractors tax prescribed by Section 191 of the Code and not to the advance sales tax imposed by
Section 185(m) in relation to Section 194 of the same Code.

Case Digest
ENRICO S. EULOGIO vs. SPOUSES CLEMENTE APELES and LUZ APELES
Topic: Option defined
Parties: ENRICO S. EULOGIO, petitioner
SPOUSES CLEMENTE APELES and LUZ APELES, respondents
Facts:

The subject property in question consists of a house and lot situated at Timog Avenue, Quezon City whereby said lot is under
the names of the respondent, Spouses Apeles. The respondents entered into a contract of lease with Arturo Eulogio, the father of
herein petitioner. Upon the death of his father, herein petitioner, Enrico succeeded as lessor of the subject property where he used it
as his residence and place of his business involving buying and selling imported cars.
Subsequently, both petitioner and respondents allegedly entered into a Contract of Lease with Option to Purchase involving
the subject property. According to the said lease contract, Luz Apeles was authorized to enter into the same as the attorney-in-fact of
her husband, Clemente, pursuant to a Special Power of Attorney executed by the latter in favor of the former on 24 January 1979. The
contract purportedly afforded Enrico, before the expiration of the three-year lease period, the option to purchase the subject property
for a price not exceeding P1.5 Million. Hence, petitioner exercised his option to purchase the subject property by communicating
verbally and in writing his willingness to pay before the expiration of the three-year lease period but the respondent spouses ignored
his manifestation. With this, he resulted to the barangay to enforce the said contract but the respondent did not appear in the
settlement proceedings. Hence, the barangay issued to Enrico a Certificate to File Action.
The respondent demanded that he pay his rental arrears from January 1991 to December 1996 and he vacates the subject
property since they would need the subject property. Without heeding the demand of the respondent spouses, Enrico instituted a
Complaint for Specific Performance with Damages against the spouses founded on paragraph 5 of the Contract of Lease with Option
to Purchase vesting him with the right to acquire ownership of the subject property after paying the agreed amount of consideration.
Petitioners Contention:
-enforcement of the contract
Respondents Contention:
- denied that Luz signed the Contract of Lease with Option to Purchase, and posited that Luz's signature thereon was a forgery and
evidence presented as evidence Luz's Philippine Passport claiming that at the time the contract was entered into she was in the United
States of America.
RTC Ruling:
-favored the Petitioner Enrico since absent any finding of forgery, the RTC bound the parties to the clear and unequivocal stipulations
they made in the lease contract. Accordingly, the RTC ordered the spouses Apeles to execute a Deed of Sale in favor of Enrico upon
the latter's payment of the agreed amount of consideration.
Court of Appeals Ruling:
- granted the appeal of the spouses Apeles and overturning the judgment of the RTC since it chose not to accord the disputed Contract
full faith and credence.
Issue:
Whether or not such contract granting an option entered into was valid?
Supreme Court Ruling:
NO.
- the provision on the option to purchase the subject property incorporated in said Contract still remains unenforceable since an
option is a contract by which the owner of the property agrees with another person that the latter shall have the right to buy the
former's property at a fixed price within a certain time. It is a condition offered or contract by which the owner stipulates with another
that the latter shall have the right to buy the property at a fixed price within a certain time, or under, or in compliance with certain
terms and conditions; or which gives to the owner of the property the right to sell or demand a sale. An option is not of itself a
purchase, but merely secures the privilege to buy. It is not a sale of property but a sale of the right to purchase. It is simply a contract
by which the owner of the property agrees with another person that he shall have the right to buy his property at a fixed price within
a certain time. He does not sell his land; he does not then agree to sell it; but he does sell something, i.e., the right or privilege to buy
at the election or option of the other party. Its distinguishing characteristic is that it imposes no binding obligation on the person
holding the option, aside from the consideration for the offer. It is also sometimes called an "unaccepted offer" and is sanctioned by
Article 1479 of the Civil Code. For an option contract to be valid and enforceable against the promissor, there must be a separate
and distinct consideration that supports it. In other words, "an accepted unilateral promise" can only have a binding effect if
supported by a consideration, which means that the option can still be withdrawn, even if accepted, if the same is not supported by
any consideration. Here it is not disputed that the option is without consideration. It can therefore be withdrawn notwithstanding
the acceptance made of it by appellee. Without consideration that is separate and distinct from the purchase price, an option
contract cannot be enforced; that holds true even if the unilateral promise is already accepted by the optionee. The consideration
is "the why of the contracts, the essential reason which moves the contracting parties to enter into the contract".
In the present case, it is indubitable that no consideration was given by Enrico to the spouses Apeles for the option contract.
The absence of monetary or any material consideration keeps this Court from enforcing the rights of the parties under said option
contract.

G.R. No. 109125 December 2, 1994

ANG YU ASUNCION, ARTHUR GO AND KEH TIONG, petitioners,
vs.
THE HON. COURT OF APPEALS and BUEN REALTY DEVELOPMENT CORPORATION, respondents.
Facts: